My name is Rebecca Richardson and I'm a senior mortgage consultant with Windham capital mortgage, a frequent question that I get asked is, what is my credit score?
The thing to keep in mind is that lenders have set versions of credit reporting that we have to pull:
Most of the time, if you're going to a website like Credit Karma, or you're getting your credit score, or your credit card, that is a different formula. The one that I have found online, that tends to be the closest is my FICO because they have what is called a mortgage score, the higher your score, typically, the better your interest rate, the lower your closing costs, one of the top ways to improve your credit score is to enroll in auto pay.
The second thing that I recommend is paying attention to debt utilization:
A lot of people think that as long as you haven't maxed out your accounts that you're good to go. Actually, you start to get penalized once you go over different thresholds. You want to see what is your credit limit and work to get your balances under that because you will start to see your credit increase simply by paying attention to those percentages.
A third thing that comes up a lot are credit inquiries:
Credit inquiries get scored differently, once you have your credit report pulled, you have somewhere between 30 and 45 days where any additional inquiries don't hit your score.
The fourth tip is to pay attention to what accounts you might be an authorized user on:
If that account doesn't have a positive history that can actually be a drag on your score. As an authorized user, you may want to remove yourself from that account.
The fifth and final point is that if you have had some negative credit in the past:
The thing you want to pay attention to is credit, it’s all about an overall view of your credit history. If you have issues in the past, you want to make sure that you have re-established positive credit. It's not just enough to have old paid collections, things like small installment loans, secured credit cards, all of that can help to establish that now your credit is back in shape, and you're ready to own a home.
Give me a call and let's walk through where your credit stands right now and maybe what needs to happen to put you in the best position to buy. You’re going out this weekend? Give me a call or shoot me a message and let me help you on that path.